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Dan Morehead said bitcoin price would rise but that cryptocurrency mining does not have any fixed support like other markets such as copper so cryptocurrency companies risk running losses for months.

“I think it is very difficult to ever do real world calculations of the cost of mining. All these are sunk costs and people have built these enormous data centers with computer chips that are doing the mining. I think it is unlikely to have any fixed support there.”

“The company might run a loss for six months hoping that the price is coming back. I think there really isn’t a level like in copper, where if you get below the marginal cost people just stop their mines. Here I think there isn’t some kind of fixed floor like that.”

He then added: “Bitcoin was half this price a year ago and it was all working great. The price could go down, but I really do think a year from now it will be much higher than it is today.”

Bitcoin lost a significant amount of ground on Wednesday, dropping 8.72% on the day to trade at $6,494.73. Meanwhile, Ethereum crashed down by 11.98% to trade at $306.88.

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